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Proposal called “tipping point” for manufacturers

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Illinois

The state’s large industrial and manufacturing companies would see significant increases in their electric bills to help bankroll a dramatic expansion of energy-efficiency programs run by Commonwealth Edison and downstate utility Ameren Illinois as part of a wide-ranging draft energy bill circulating in Springfield.

Over the next 13 years, the efficiency charges alone would cause electricity costs for the average Illinois industrial user (as defined by the U.S. Energy Information Administration) to rise $8,271 in 2020, scaling up dramatically to an increase of $43,871 by 2030, according to an analysis by Argonne National Laboratory.

For large manufacturers like steelmakers, the efficiency charge, which would gradually increase by more than five times in that period, would add hundreds of thousands in costs in the short term and potentially well over $1 million by 2030.

The average monthly electricity charge paid by Illinois manufacturers last year was 6.67 cents per kilowatt-hour, according to the EIA (see the PDF). The efficiency charge alone for larger industrial customers would boost that by 1.7 percent in 2020 and 9 percent in 2030.

For a state whose business climate is a persistent source of concern and debate as some manufacturers consider relocating to cheaper locales, the approach raises questions.

“This could be a tipping point for some companies,” says Mark Denzler, vice president and chief operating officer of the Illinois Manufacturers’ Association. “Energy (costs) have been one of the few advantages in Illinois for the last 20 years.”

Discuss.

* Related…

* Editorial: For consumers, energy bailout doesn’t compute

posted by Rich Miller
Tuesday, Nov 8, 16 @ 9:55 am

Comments

This is terrible.

Comment by illinois manufacturer Tuesday, Nov 8, 16 @ 10:06 am
9% of 6.67 is less then a penny per kwh increase by 2030. Also it looks like we have lower rates then most states already.

Comment by DuPage Tuesday, Nov 8, 16 @ 10:10 am
From the Crain’s Editorial: “Power producers aren’t pushing for more money because we need the power. Quite the contrary: In 2015, Illinois generated 41 percent more electricity than it needed, even as power demand has shrunk 3.8 percent since 2011.

Even if provisions never materialize to keep coal-fired plants fired up, the energy bill still would subsidize unnecessary nukes, meaning Illinois ratepayers will effectively be paying more so ratepayers in other states who use our surplus power will pay less.

And that’s just another incentive for commercial and industrial consumers—and employers—to jump the border.
****
More of this please…

http://www.sheddaquarium.org/About-Us/Press-Room1/Press-Releases/2016-Press-Releases/Battery-Announcement/

Comment by Anon221 Tuesday, Nov 8, 16 @ 10:12 am
Crazy!

Comment by Saluki Tuesday, Nov 8, 16 @ 10:22 am
It’s easier to bribe the legislature now than the Illinois Commerce Commission…which was originally created because it would be easier for Samuel Insull to bribe than the General Assembly.

We’ve come full circle.

Comment by Anonymous Tuesday, Nov 8, 16 @ 10:25 am
This sounds like a clever ploy by ComEd to scare the powerful IMA and then make a side deal with them to remove the industrial charge and shift it to residential and commercial. Then IRMA makes a deal for retail. BOMA may even come calling for an office deal. ComEd controls the Utility Committees already, so the side deals eases the way for approval.

Comment by Sububanon Tuesday, Nov 8, 16 @ 10:35 am
Gov. Rauner certainly wouldn’t allow that, right?

The only thing he’s talked about since taking office is how he’s going to “create” manufacturing jobs by bringing in “dozens” of manufacturers once his agenda is passed.

Signing off on a new energy tax would be a betrayal of that promise.

–This sounds like a clever ploy by ComEd to scare the powerful IMA and then make a side deal with them to remove the industrial charge and shift it to residential and commercial. –

Sounds about right to me.

Comment by wordslinger Tuesday, Nov 8, 16 @ 10:43 am
Yes, this is clearly IMA gunning for something as part of the package. Because it is a simple fact that the primary reason our rates are so low is because of the energy efficiency that this state has done over the past 9 years. The highest amount of electricity this state has used was back in 2006. The energy efficiency program started the next year.

The truth is more than 60% of those same large users take the incentives to make energy efficiency improvements at their buildings. They simply don’t want to pay for it. They want residential customers to pay, and then they get the benefits. That just is not going to work.

Honestly, there is only one thing that lowers rates, causing the utilities and power plants anxiety, and that is energy efficiency.

Comment by Ggeo Tuesday, Nov 8, 16 @ 10:49 am
Finally. This needed to be brought to light (no pun intended) a year ago. As previously written, the widget factory is up for sale. The only interest has been from entities out of the Pacific rim. This issue, as well as work comp, have been an anchor to a closing. Maybe the great one should invest his Intersect Illinois dollars directly into the pockets of ComEd and Ameren.

Comment by Blue dog dem Tuesday, Nov 8, 16 @ 10:57 am
Rainy morning here in Springfield. Voted near the Capitol, and I had no wait as I walked up to my precinct table. Seemed pretty active, and the election judge said there’d been a pretty steady clip of people coming in.

Comment by Illini Lurker Tuesday, Nov 8, 16 @ 10:58 am
Deregulation in 1999 lowered the rates.

Comment by Postbot 6000 Tuesday, Nov 8, 16 @ 10:58 am
Wikipedia says that it takes about 400 kilowatt/hours of electricity to make a short ton (2000#) of steel in an arc furnace.

Adding 1 cent per kilowatt/hour to the electric bill for a steel mill adds about $4/ton to the cost of making steel. American steel prices are depressed and China is dumping steel at subsidized rates through Viet Nam.

I can see why the steel makers are opposed to the price increase.

Comment by Huh? Tuesday, Nov 8, 16 @ 11:09 am
Shouldn’t lower electric rates be part of the turnaround agenda? Oh wait no scratch that. Pic of the press the housing prices in Winnetka

Comment by Porgy Tirebiter Tuesday, Nov 8, 16 @ 11:29 am
I think systematically removing our state’s few remaining competitive advantages is an excellent long-term economic development strategy.

Comment by sulla Tuesday, Nov 8, 16 @ 11:41 am
Just part of the eternal quest to push my costs on someone else’s back.

Comment by Plutocrat03 Tuesday, Nov 8, 16 @ 12:34 pm
“- Postbot 6000 - Tuesday, Nov 8, 16 @ 10:58 am:

Deregulation in 1999 lowered the rates.”

While you are partially correct that 1997 dereg lowered rates, the driver of low prices today is fracking and the massive and growing excess of supply (41%) and decline in demand (3.8% in just the last four years).

Comment by BEST Dave Tuesday, Nov 8, 16 @ 3:16 pm